Senate Democrats rewrite Obama jobs bill

Senate Majority Leader Sen. Harry Reid, D-Nev., is leading a rewrite of President Barack Obama's jobs bill in an effort to win support from other Democrats. (AP Photo)

WASHINGTON (AP) — Senate Democrats are rewriting portions of President Barack Obama's jobs bill to include a new 5 percent tax on income above $1 million — a proposal that is sure to be blocked by Republicans.

Senate Majority Leader Harry Reid, D-Nev., said Wednesday he is changing the plan in an effort to attract more votes from fellow Democrats. He said he plans to bring the bill to the floor next week. Reid, however, wouldn't predict whether Democratic senators would unite behind the measure, which is unlikely to get any support from Republicans.

The new tax would replace tax increases sought by the president. Obama's plan called for raising taxes by limiting itemized deductions — including those for charitable donations and mortgage interest — for individuals making more than $200,000 and married couples making more than $250,000.

Reid said the millionaire's tax would cover the entire cost of Obama's jobs bill — about $450 billion over the next decade.

Sen. Chuck Schumer, D-N.Y., said there was opposition to Obama's plan because people making $250,000 or $300,000 in high cost areas, like New York, don't consider themselves rich.

"Drawing a line at $1 million is the right thing to do," Schumer said.

The top income tax rate is currently 35 percent, on taxable income above $379,150. Under the bill, the new top rate for millionaires would go to 40 percent.

Reid announced plans to move the bill as Obama tried to blame Republicans for Congress' failure to act.

Obama traveled to Texas Tuesday to deliver his most caustic challenge yet to House Republicans who have not allowed a vote on the legislation unveiled nearly a month ago.

"What's the problem? Do they not have the time? They just had a week off. Is it inconvenient?" he said in Mesquite, Texas, singling out House Majority Leader Eric Cantor for special criticism.

Cantor has said the White House's "all or nothing approach is unreasonable."